Two major solar power financing deals in the US

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MidAmerican Energy Holdings, owned by Berkshire Hathaway has agreed to buy the Topaz solar power generator in California currently under construction. The plant is valued at $2bn and is expected to generate 550mw of electricity, approximately half that of a typical modern atomic power plant. First Solar are building the plant and recently failed to get government guarantees putting the project in doubt. It will operate the plant upon completion.

Last week details of the Bank of America Merrill Lynch financing for SolarCity to develop SolarStrong were confirmed. This is a project to provide solar power for military accommodation in several locations across the US. The project has an approximate cost of $1bn and is expected to generate 300mw of electricity and provide power to over 120,000 homes.

The deals shows the significant change in thinking by some of the most important financial institutions in the United States, as well as the failure of the Obama administration to put its rhetoric regarding renewable energy into effect. The deals are expected to make it much easier for other builders of solar power plants to gain finance in the future. Tax incentives are in place until 2015 to incentivise solar investment. The US government hopes that the technology will become more affordable and risks more acceptable to leave deals after that time to the normal market.